Alliance scores BHP FIFO contract

Alliance Aviation Services has won a contract to supply charter flights for BHP Billiton Iron Ore's fly-in fly-out workers, bumping rival operator Cobham Aviation Services.

The contract for three years, with two one-year options is Alliance’s largest to date.

It means the company will fly 36 sectors per week between Perth and BHP’s airports at Coondewanna and Barimunya in the Pilbara.

BHP Billiton Iron Ore recently went out to tender for its FIFO services.

Alliance said its contract represented a significant proportion of the overall tender.

In 2012 Cobham announced it had consolidated its FIFO arrangements with BHP for services to Coondewanna and Barimunya, valued at $65 million.

Alliance, which opened a new lounge in Perth last year, will use existing Fokker 100 and Fokker 70LR jet aircraft to carry out the new contract.

Today Alliance announced that delays in a number of its contracts caused it to downgrade its profit guidance for this financial year to between $12 million and $13 million.

In February it said it expected to achieve a profit of $16 million to $17.5 million for this financial year.

The company said to maintain aircraft and staff overheads while waiting for contracts to start, Alliance estimated it lost $1.8 million this financial year.

It provided profit guidance in the range of $18 million to $21 million for the financial year 2014-15, noting this did not include any new contracts Alliance may yet win in this period.

Alliance shares were trading at $1.22 at 2.01pm WST, up 5.17 per cent following the announcement.